Premium grocery gaining ground in France

News, 24 November 2009

PARIS: Premium grocery products are increasing in popularity among both retailers and certain groups of consumers in France, despite the fact many shoppers have been forced to rein in their expenditure during the downturn.

Earlier this year, Lars Olofsson, ceo of Carrefour, the world's second-biggest retailer, said the company's French stores would be focusing on "promotions, price and loyalty" in an effort to boost its "price image."

However, the hypermarket giant has also announced its intention to stock a wide range of healthier, organic and premium goods, as it seeks to serve the varying needs of its customers, a trend that also appears to be gaining traction among its rivals.

A study undertaken by Linéaires, the retail-based print magazine, compared the prices of 600 grocery goods on sale in Carrefour, Intermarché, Leclerc and GéantCasino.

It found that organic offerings were, on average, 72% more expensive than regular alternatives, rising to a high of 95% in the "traiteur", or self-catering segment, and 90% for fresh fruit and vegetables.

These types of brands typically carried a premium of 73% in both the confectionary and snacks categories, and 57% in the dairy sector.

Yves Marin, of Dashkoma, the retail consultancy, said such high-end products are particularly attractive to more mature, wealthy consumers living in urban areas.

Germany is estimated the largest market for organic goods in Europe, with sales of €2.8 billion ($4.2bn; £2.5bn) in 2008, according to BioFach, the industry association.

The UK and France both posted comparative totals of €2.6bn, with Institut Precepta estimating that revenues in the latter of these two nations will rise by at least 10% over the period to 2012.

However, in terms of the proportionate consumer base for organic grocery ranges, Switzerland, Austria, Denmark and Luxemburg boast the highest overall figures at present.

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